The heads of state of Brazil, Russia, India, China and South Africa are set to meetin the Russiancity of Ufa July 8-10 for their seventh meeting as the BRICS bloc.
Russia is currently the chair of the group; one of its priorities for this summit is to kickstart the much-anticipated BRICS development bank as an alternative to the International Monetary Fund. The bank will be located in Shanghai and will be headed by Indian banker K.V. Kamath for the first six years, followed by five-year terms each for Brazil and Russia.
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There has been recent speculation that membership to the new bank would be offered to Greece, which is currently facing off with its creditors who are demanding the government implement austerity programs in exchange for further bailout loans. However, no moves toward this have yet been made, according to Russian Finance Minister Anton Siluanov.
The BRICS bank has now been ratified by the legislatures of Russia, India and China, the last of which is expected to contribute the lion's share of capital. Russia's upper house of Parliament ratified a proposal earlier in May to establish a $100 billion foreign currency reserve pool for BRICS countries. The pool is intended to protect national currencies from the volatility of global markets, ensuring that, in the event of a financial emergency—like a crisis in the banking system—the BRICS countries would no longer have to depend on the IMF.
The creation of the development bank was agreed upon during the 2014 BRICS summit.
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The new bank's primary aim will be to finance infrastructure and sustainable development projects in BRICS nations, as well as other emerging and developing countries. The BRICS Bank is seen as a rival to the oft-criticized World Bank and International Monetary Fund.
Evoking the BRICS summit recently, Russian President Vladimir Putin also emphasized the importance and potential ties with Latin America, as a sustainable alternative to Western allies.
The BRICS are also expected to release a statement upon the Ukrainian crisis, rejecting a military solution and encouraging negotiations, according to the declaration of a Russian state official to the local press this Tuesday.
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The 2014 BRICS Summit
The 2014 summit, which took place in Brazil, kick-started the BRICS bank.
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Political economist Patrick Bond, director of the Centre for Civil Society at the University of KwaZulu-Natal School of Development Studies in South Africa writes:
Contrary to rumour, the Brazil-Russia-India-China-South Africa alliance confirmed it would avoid challenging the unfair, chaotic world financial system at the Fortaleza summit on July 15. The BRICS “are actually meeting Western demands,” as China Daily bragged, “to finance development of developing nations and stabilize the global financial market.” If BRICS subservience continues, remarked financier Ousmène Jacques Mandeng of Pramerica Investment Management in a Financial Times blog, “it would help overcome the main constraints of the global financial architecture. It may well be the piece missing to promote actual financial globalisation.” Read more...